Mr. Noel Brett:

I will deal with the Chairman's final question first. That refers to Deputy Ó Broin's question earlier about people sitting on vacant properties. I will go back and speak with members, although I am not aware of that being an issue. It would be in people's interest not to have vacant properties depreciating in value, being vandalised and so forth. I will go away and respond to that question.

To clarify for Deputy Coppinger, I am not suggesting that homelessness in the acute form we are seeing at present is purely a supply issue. What I said earlier is that there is a supply issue. In terms of broad macrosocial policy, there is a supply issue with social housing, affordable housing and rented accommodation. There is also an issue with owned or mortgaged accommodation. It is clear that there is a good supply of mortgage credit but there is not a good supply of houses for people in that category to buy. I take the Deputy's point, which is very well made, in terms of Ireland's social policy going back not just to the crash but also perhaps a little further. Decisions were taken about how social and affordable housing was provided in this country and, clearly, the country has not provided adequate social or affordable housing for quite a long period of time. That is exacerbated now due to increased rents and a shortage of homes for people to buy.

Thankfully, increasing employment is important in terms of people's ability to deal with some of the pressures they face. However, as I keep saying to the committee, we must avoid another credit bubble. We must find mechanisms to put supply in those four sub-sectors where it is needed. That is the key issue. All of these things have unintended consequences and we must be clear about how money transfers across the economy. An intervention in one sector costs somebody in another sector, by which I mean what a subsidy in one sector does to the availability of social housing, because this is a zero-sum game. It is very important to be clear that I am not suggesting homelessness can be sorted simply by supply. It is a far more complex issue and it cuts across many different elements of social and public policy in Ireland.

Perhaps I should have made it clearer at the outset that we, as a federation, do not get into the practices of individual banks or the competitive issues between banks. I am specifically precluded by competition law from doing that. Unfortunately, I am not in a position to tell the committee why a particular bank takes a certain line. They all must take individual business decisions. There must be a sustainable, functioning banking system for an economy to function properly and effectively for all of its citizens, . The banking system is important in an economy. Individual banks must look at the pressures they face and the business model they follow, and they must make individual decisions. I do not have control or oversight over - or even knowledge of - those individual pieces.

To respond to Deputy Wallace on the banks' compassion and the eviction rates, what we have tried to do, at a cross-industry level and in the actions individual banks have taken, is try to equip borrowers in distress with the type of support they need to level up the power imbalance that can exist when one is in distress and trying to deal with one's lender. With regard to repossessions, the court statistics in Ireland show that in 2015 there were 722 repossessions on foot of court orders.

An additional number of houses were voluntarily surrendered. In an Irish context, the repossession rate constitutes 0.21% of all mortgages, whereas in the United Kingdom the repossession rate, at 0.65% of mortgages, is three times higher. I am not suggesting this makes repossessions okay - it does not - but I heard the previous Governor of the Central Bank state that in a fully functioning mortgage market, one would ordinarily expect up to 2% of mortgages to default and go down that route. This does not make matters any easier.

I agree with Deputy Mick Wallace on the issue of compassion. The number of restructured mortgages and the faster rate at which they are being worked through, as well as the fact that 86.5% of the mortgage holders affected are meeting the terms of their arrangement, provide good early evidence that banks are seeking to be more compassionate. They realise it is in everyone's interest, including those of the banks and the individuals who have borrowed money, to have mortgage holders remain in their properties. This returns us to the point that interventions such as the mortgage-to-rent scheme are needed for those who cannot go down this route.

It is important to reiterate that banks must be profitable and must survive. To do this, they need to do business. I am keen to engage with the committee on how we can play a viable role in the various sub-sectors of the housing market to which we referred a number of times.

The key issue with regard to developers will be equity. While a significant level of credit is available in the economy for builders and developers, the problem is that developers who have been bruised from the previous experience may not have equity. This presents a challenge as under the current rules, no bank or lender may lend 100% on any development, nor should they. That is a big challenge. Another challenge, one for which I do not have an answer, is how to find a way to get equity into the system. Speaking from the perspective of my members, they need to lend in this sector but only to viable entities which have equity.